PacifiCorp

MEMORANDUM *

PacifiCorp is a regulated public utility providing retail electrical services to customers in the northwestern United States. Monsanto operates an elemental phosphorous plant at a site near Soda Springs, Idaho. PacifiCorp and its predecessor have provided electrical services to Monsanto since the early 1950’s. Monsanto is PacifiCorp’s largest single point customer, and electricity represents approximately twenty percent of Monsanto’s operating costs. The companies have successfully negotiated power supply agreements between themselves for more than fifty years. They entered into the agreement at issue in this case, the 1995 Agreement, after extensive negotiations.

As a matter of practice, the parties typically initiated negotiations for the next power supply agreement before the existing agreement expired. For example, they began negotiating a new agreement in late 1994, even though the 1991 Agreement did not expire until 1997. 1 Section 2.1 of the 1995 Agreement sets forth the term of this Agreement as follows:

PacifiCorp claims the earliest date that notice of termination can be given is December 31, 2000—one year before the base term expires. Monsanto interprets…